An indispensable tool for modern hosts and property managers is a vacation rental agreement. In an ideal world, you would only ever deal with perfect guests who follow your rules and treat your property as if it were their own home.
And while the majority of Airbnb guests do, there is, unfortunately, a small portion who may not respect your rules and requests. Since it’s impossible to know what kind of guests you host until they arrive, how do you protect your rental while also enjoying a high occupancy rate?
The most popular solution to this age-old problem is a vacation rental agreement. Read on to discover why a vacation rental agreement is so important and what are the must-have key points to include in it.
A vacation rental agreement is a signed contract between a host and guest detailing the terms and conditions of the reservation. It protects everyone involved from potential misunderstandings and breaches of the agreement.
Not every host chooses to use a short-term rental agreement in their property management strategy. Some hosts may worry that asking people to sign a legally-binding document before booking their property may put them off.
However, there are actually many benefits that a vacation rental agreement can bring to both hosts and guests:
A rental agreement stipulates any discussions and arrangements made between you and your guests. By putting all agreed points into writing, there’s greater transparency between you and your visitors. This minimizes the risk of potential disputes and problems happening later on in the reservation.
Because of the clarity that a vacation rental agreement brings, there is less room for misunderstandings. A good idea is to write the points of your rental agreement in the simplest language possible. Avoid technical and legal jargon which could confuse readers.
When you share your agreement with your guests, make it clear to them that they can ask questions if they are unsure of anything. This way, you can be 100% certain that they are signing the document with a full understanding of what is required of them.
One of the most important benefits of a vacation rental agreement is the mutual legal protection of both parties. Because you and your guests have to review and sign the contract drawn up, you are both legally bound to it.
If someone you host ignores the agreement, you can pursue legal action if you’re unable to reach a private resolution with them. The same is true with your guest if they feel you haven’t held up your end of the agreement.
Although you may feel uncertain about using a rental agreement, there are undeniable benefits to having one at your disposal. In fact, not having one could have negative consequences for your business.
Having no rental agreement leaves your property vulnerable to unsavory or badly behaved visitors who may damage it. You also have no legal protection to fall back on if Airbnb’s Resolution Center chooses to side with the guest.
Also, with no agreement in place that clearly stipulates the end date of the rental period, you could run the risk of dealing with illegal squatters who refuse to leave your property.
Without an agreement, you also may have to deal with unpleasant complaints resulting from a lack of clear communication.
First, include the essential information of your property, such as your rental’s house number, street address, city or town, and area code.
State your full legal name, as well the full names of the people you are hosting. Make sure to include the name of everyone staying if several people are staying at your property.
Include the full rate that your visitors can expect to pay before arriving. This rate should only be the booking fee and shouldn’t include any extra fees, such as cleaning fees.
If you charge a security deposit, you can mention it here, separate from the rental rate. List the exact amount of the deposit and also state when it will be reimbursed to guests, and under what circumstances it won’t be reimbursed.
You should include the start and end dates of the rental period, as well as the check-in and checkout times.
It’s very important to list your maximum occupancy. This will safeguard your vacation rental against extra guests, illegal parties, and events. If you decide to allow more visitors, you can mention it in this section and state the extra cost for each guest.
Explain how your guests can access your property, whether it’s by a traditional lock, Airbnb lockbox, or remote access login. Do not include any passwords or passcodes, as people reviewing the agreement could share it with others.
In case your guests forget to read your house rules, including them in your vacation rental agreement is a great way of ensuring they get read. If there are any penalties that you charge for breaking the rules, be sure to underline them here.
Your cancellation policy stipulates the terms under which you, or guests, may cancel the reservation. You should mention the cancellation policy type (flexible, moderate, strict, or super strict). Also, list the notice period (if any) for the cancellation to be given as well as whether a partial or full refund will be issued.
Discuss how visitors should settle the booking fee. Take note that Airbnb does not allow payments of any kind to be made off of the platform for security purposes.
Even though you likely hire an Airbnb cleaning service or team, you may still request that your guests do a spot of cleaning before checking out. Be clear and detailed about your requests (“Please wash and pack away dirty dishes before you leave,” “Please take any used trash bags outside and place them in the large bin,” etc.).
If you have any amenities on the property, list them and request that guests report any damage to them. Keep in mind that you should never leave valuables on the property, such as money, jewelry, and personal gadgets.
While we hope that guests will never violate the document you both signed, it’s better to be safe than sorry. Listing the actions you will have to take, should there be a violation of the vacation rental agreement, shows that you mean business.
Finally, but no less important, you should have a place for you and your guest to sign your acceptance of the agreement’s terms and conditions. Above or below the signatures, you should have space where you can both write the date to confirm the date of signature.
If you would like extra assurance that they have read every page of the document, you can add a space for their signature at the bottom of each page.
While it’s true that an agreement in place offers many advantages, an important question to ask is whether having one is right for your business? Ultimately, the decision is up to each host who should consider the following before deciding:
When writing your rental agreement, you have several options, which are:
Each option has its pros and cons, and it’s up to you to decide which one is best suited to your needs.
If you decide to draw up your own rental agreement, make sure you research what to include in the document. You can, for example, look up the rental agreements drawn up by other hosts for inspiration, or consult with a property management company.
Before finalizing any vacation rental agreement, always make sure you consult with an attorney. They will be able to review the terms and conditions and give legal advice if it conflicts with Airbnb regulations.
You may be wondering if a regular rental lease agreement is good enough to replace a vacation rental agreement. The two may have similarities, but you can’t use them in place of each other. A lease agreement is a binding contract between a landlord and tenant for the rent of the property for a fixed period (usually 6 to 12 months).
A vacation rental agreement is also a binding contract but between host and guest, rather than landlord and tenant. It stipulates the rights and responsibilities of both parties. However, it is typically over a much shorter period than a traditional lease agreement (usually a maximum of 28 days).
In a regular rental lease agreement, the landlord does not pay for the cost, electricity and monthly rates, and a tenant pays for them. In a vacation rental agreement, the host generally pays for their guest’s water and electricity usage.
In a lease agreement, the landlord will also clearly highlight the monthly rate that their tenant will be expected to pay for the duration of the lease. A vacation rental agreement will also list the rental rate that their guest will have to pay, but it’s usually a once-off payment due to vacation rental periods being less than a month long.
In a vacation rental lease agreement, hosts may have specific requests and instructions for guests to follow. This is in contrast to a traditional rental lease agreement where the tenant is left to their own devices while they rent the property.
Hosts play a much more active role in the experience that guests have in their rentals, in comparison to a landlord’s role in a tenant’s stay. This is reflected in the structures of a rental lease and vacation rental agreement.
In short, a lease agreement, while somewhat similar, does not cover the requirements of a vacation rental agreement.
Whether you’re a seasoned host or just starting a vacation rental business, a rental agreement will protect your property and business. Another way to ensure ongoing success is to use automation in your business management. Vacation rental software, like iGMS, uses automation capabilities to take care of essential tasks, such as:
Phoebe Gunning is a content writer in the Marketing Department at iGMS. She is passionate about the vacation rental industry, notably helping hosts make the most out of their vacation rental businesses. Some of her hobbies include reading, traveling and drinking a good cup of coffee.
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